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The Internet has made buying practically anything extremely easy. But is it safe to buy gold online, or should you look for an in-person dealer instead?
Buying gold online can be entirely safe — as long as you take the necessary precautions. Looking for a reputable online dealer, verifying the authenticity of the gold, and purchasing insurance coverage are all excellent ways to protect your investment.
Is It Safe To Buy Gold Online?
Trustworthy online dealers make the process of buying gold online completely safe. When you buy from these dealers, they will insure your purchase, ship it using the safest delivery methods, and require you to sign for the package when it arrives. Alternatively, you can opt to store your physical gold with a reputable depository, and the dealer will ship it directly to the storage facility.
Advantages of Buying Gold Online
Why would you want to purchase gold online when you could just go to the pawn shop down the street instead? Consider these advantages:
- Convenience: Buying online is the most convenient method of investing in gold, as you can purchase from anywhere and ship it directly to your door.
- Selection: Online dealers often sell dozens of different gold coins along with various sizes of gold bars and bullion. You’ll have access to a greater selection through an online dealer than you would at your local in-person gold store.
- Transparency: Striking up a deal with your local pawnshop owner may feel a little shady, but online dealers offer full transparency without playing games. You’ll know exactly what you’re purchasing and any shipping costs or fees you may need to pay before checkout.
Risks Associated With Buying Gold Online
The risks of buying gold online are the same as those of buying anything online. The two biggest dangers come from delivery and scams.
With the vast number of packages that ship each day, some are bound to go missing. There’s always a chance your gold package will not reach its destination. Working with a gold dealer who insures against lost packages can help you mitigate this risk.
You also need to watch out for scam artists when buying gold online. These dealers may look legitimate or promise an excellent deal for their gold assets. But they’ll take your money and run as soon as you submit your payment information.
Legal Protection for Online Gold Purchases
As a gold buyer, you have access to several legal protections that can safeguard your physical gold purchase.
Consumer Protection Laws
The Federal Trade Commission has several rules and regulations to protect gold buyers. For instance, it is illegal for gold dealers to:
- Misrepresent gold content
- Use misleading illustrations
- Misrepresent the weight of gold items
- Misuse terms like “perfect” and “flawless”
If a seller misrepresents their gold products to you or uses deception in your transaction, you can report them to the FTC and attempt to get your money back.
Online Shopping Regulations
Aside from its regulations for gold purchases, the FTC details consumers’ rights in online transactions. For example, online sellers must adhere to the terms they have provided for the sale, including taxes, shipping costs, refund policies, and restocking fees.
Additionally, when you pay for your gold transaction by credit card, you’ll have federal protections for the transaction. If you never receive your gold products, you can file a claim with your credit card company to dispute the charge.
Government-backed Gold Dealers
Some types of gold products also come with government protections. For instance, government bullion encompasses gold bars and coins that the U.S. Mint produces. The U.S. government guarantees these coins for their weight, purity, and content.
How To Ensure the Safety of Online Gold Purchases
Is it safe to buy gold online? Yes — but be sure to follow these steps to protect your transaction.
Research the Seller
Before giving your payment information to a gold seller, research them thoroughly. Determine how long they have been in the industry, the types of gold products they offer, and their general reputation in the market.
Verify the Authenticity of the Product
Trustworthy online gold dealers leave no question about the authenticity of their products. You can verify the gold content through certifications.
Use Secure Payment Methods
You should also ensure an online gold dealer uses encryption within its transactions to protect customer payment information.
Check for Customer Reviews and Ratings
Read reviews on the Better Business Bureau to learn about past customer experiences with the dealer.
Insurance Options When Buying Gold Online
Insuring your physical gold purchase is an additional measure you can take to prevent scams and protect your assets. You have a few insurance options:
Third-party Insurance Providers
Some third-party insurance companies offer coverage for gold purchases. You can also look into third-party coverage once you have secured your physical gold and are storing it in a bank safe deposit box.
Looking for a seller that insures its gold transactions is a great way to protect yourself against scams. With this type of insurance, the seller pays to replace the gold you purchased if it arrives damaged or never shows up.
Personal Insurance Policies
You might also consider adding your gold assets to your homeowner’s insurance policy. Just remember that the coverage limits for these policies are often pretty low, with some only covering $250 of collectibles.
What Should You Do if You Receive a Fake Gold Product?
If you’ve received fake gold from an online dealer, you can report it to the FTC at this link. First, reach out to the gold dealer to let them know you are going to take legal action. This threat may be enough to get your money back.